Time is running out for a definitive Israeli-Palestinian deal. Jerusalem is the obstacle. But with taboos broken, the city could be the capital of both states

ISRAEL under Ehud Barak keeps coming tantalisingly close to a definitive peace with its immediate neighbours. The chance slipped by with Syria—blocked by a few metres of lake shore—and may now be lost with the Palestinians, because of a couple of mosques and the site of a temple. There is more to it than that, of course, but not much more.

Although a pity, no great harm was done when talks with Syria fizzled out earlier this year. Israel's relations with Syria are pretty static, unlikely to deteriorate. Not so with Palestine. The two peoples constantly interact and their relations are volatile. They cannot safely be put on hold. The potential for disaster—whether from Israelis pre-emptively building on disputed land or Palestinians resorting to violence—is immense. One breath-holding deadline, September 13th, passed by without Yasser Arafat declaring a state (see article). Another comes at the end of October, when Mr Barak's minority government has to face a stormy Knesset returning from recess, and America, the mediator, is on the edge of its election. There is not much time—and an urgent need for both weary parties to compel themselves into another fresh effort.

They have already, under Bill Clinton's guidance, advanced a long way. In July, at Camp David, they agreed, basically, that a Palestinian state would be established in Gaza and about 90% of the West Bank, with Israel annexing its big settlement blocks. An international fund would be set up to compensate the 4m or so Palestinian refugees; Israel would express regret (but not responsibility) for their plight and absorb some “tens of thousands” of them. But the talks collapsed over Jerusalem, which both Israel and Palestine want as their recognised capital. Nothing occurred at the millennium summit last week to suggest that things had moved on.

Yet both sides have conceded principles on Jerusalem, a city resonant with symbolism and religious sentiment. By agreeing, as he apparently did, to Palestinian sovereignty over several Arab neighbourhoods within the municipal border, Mr Barak has tacitly dropped Israel's long insistence on the city's indivisibility, the mantra that it should remain “united forever under Israeli sovereignty”. But the Palestinians, too, made concessions. Shlomo Ben-Ami, Israel's foreign minister, defending himself against attack, pointed out that Mr Arafat had also broken taboos by agreeing that 11 Jewish neighbourhoods in the city's eastern half should be part of Jewish Jerusalem. In addition, Mr Arafat agreed that three Jewish settlements in the West Bank should be annexed to Jerusalem in a swap for Israeli land handed to Palestine. This cracking of principles opens the way for Jerusalem (West Jerusalem-plus) to become Israel's internationally recognised capital, and al-Quds (a modified East Jerusalem) to be Palestine's.

The main trouble lies at East Jerusalem's heart: the Old City, the sacred area that the Muslims call Haram al-Sharif and the Jews call Temple Mount, and the Palestinian districts just outside the Old City's walls. Mr Clinton, with leaps of imagination, seems to have suggested vertical and horizontal division (the site of Solomon's Temple is hidden somewhere beneath the compound where stand al-Aqsa mosque and the Dome of the Rock), shared sovereignty over Palestinian neighbourhoods, even divine sovereignty over the holy places. Mr Barak was prepared to accept some of these ideas as the basis for discussion; Mr Arafat insisted on full sovereignty over East Jerusalem's inner core, save only for the Jewish quarter in the Old City and the adjacent Western Wall.

In essence, the Palestinians want sovereignty over districts where their people live: the Old City is very largely Palestinian, and the adjacent neighbourhoods almost entirely so. Since Israel, through suggested changes in the municipal border, will be creating a capital for itself that is strongly and comfortably Jewish, it is perhaps illogical that Mr Barak's men should insist on retaining sovereignty over inner Palestinian areas when they are ready to let the outer suburbs go.

Try for the best

But logic has never had much to do with Jerusalem. And, in any event, Mr Arafat's bid, backed by the Islamic world, for full sovereignty over Temple Mount would plainly be unacceptable to any Jewish leader. Until “divine sovereignty” can be turned to practical effect by the two religions, it seems inevitable that a final decision, at least on the holy places, will have to be deferred. The Palestinians argue that a deal that omits so crucial a component cannot be an agreement that ends the conflict once and for all. But Israel will, correctly, demand such an agreement if it is to be persuaded to accept a Palestinian state with sovereignty over Palestinian areas. A second-best solution would be another partial, framework agreement. Better, by far, to try for the best.